YouTube rental challenge: getting off the desk, onto the couch

ByAndrew HeiningSeptember 3, 2009

President Obama uses YouTube to talk about healthcare, but would you pay to rent a movie there?

View Caption

The site known for its "check out this clip" ubiquity could soon become the scene of another kind of check-out.

As the Wall Street Journal first reported, YouTube is in talks with major movie studios to introduce a rental scheme that would stream movies to users from the first day they're available on DVD. The cost? $4 a flick.

The deal has already been dissected at length elsewhere, so here's a few of the lesser-reported particulars:

• Though studios already offer video downloads and streaming through services such as iTunes, Amazon, Netflix, and Hulu, YouTube commands a much larger audience – with around 430 million visitors a month.

• This would be YouTube's first paid-content venture; previously the company had made money solely through advertising, and has yet to turn a profit.

Thus far, the movie channel on YouTube has been rather limited, but a week-long run of "Ghostbusters" last month for the film's 25th anniversary brought in 680,000 viewers. An injection of new releases could bring more interest, but, as many have echoed, who wants to watch a feature film on a computer screen, alone, with chintzy speakers or headphones – and pay for it?

This is where Netflix has the upper hand. Its partnerships with devices such as the Xbox 360, TiVo, Roku's set-top box, and LG TVs and Blu-ray players allow it to stream movies directly to TVs – the place where viewers are much more likely to watch feature-length content (especially if they're paying for it).

Your typical American just doesn't have a computer hooked to their TV. If YouTube rolls out movie rentals without accounting for how people like to watch movies, expect numbers to flop worse than, say, Land of the Lost.